Fujairah’s low-sulfur fuel oil (LSFO) ex‑wharf premiums have remained largely stable in July, while downstream margins continue to feel the squeeze. This reflects a delicate balance between tightening supply fundamentals and competitive pressure in the bunkering and downstream markets.
Inventory Levels & Supply Balancing
After a period of drawdowns, prompt inventories of LSFO at Fujairah have steadied. With fewer replenishment cargoes expected during the summer months, demand-side support has helped maintain ex‑wharf premiums. However, downstream buyers are pushing back, intensifying competition into delivered prices.
Although ex‑wharf premiums have stayed afloat, delivery costs have remained under pressure. Barge availability in Fujairah and nearby Khor Fakkan remains strong, increasing competition among suppliers. High-sulfur fuel oil (HSFO) has especially faced margin compression due to tight barge availability and aggressive pricing tactics.
Fujairah’s LSFO market appears balanced but fragile. While inventory trends point to steady supply, weak downstream demand and aggressive buyers are likely to keep delivered margins under pressure—even if ex‑wharf premiums stay firm.
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Source: Platts
